Law: Income Tax Act, 1961

Section: 256(1)

Income-tax---Income--Interest--Acquisition of assessee's land by Government--¬Compensation paid and possession taken by Government--Assessee claimed higher compensation--Proceedings for grant of higher compensation remained pending and later award of compensation announced with 5% interest--Held, such interest would not accrue from date of decree of Court but falls to be calculated and paid from date of dispossession till payment--Interest is payable in each successive year and is liable to be assessed in that year itself--Assessment of such accrued interest, therefore, could not be postponed till it was actually paid to the assessee--Income-tax Officer was not empowered to assess income accrued in one year as income of an earlier or subsequent year. [Case-law discussed]. JUDGMENT JAGANNATHA SHETTY, J.--The question referred in I T.R.C. Nos.158 & 159 of 1978, and 11 & 12 of 1979, at the instance of the Department, under Section 256 (1) of the Income-tax Act, 1961, is common and it runs as follows:-. "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that only interest at 5 percent, on a sum of Rs.82,500 forming the balance of compensation receivable by the assessee was assessable for the assessment years 1972-73, 1973-74, 197475 and 1975-76." The question referred in I.T.R.C. No.18 of 1982 for the assessment year 1976-77 is slightly different, but the substance, is the same as above. The facts behind the legal formulation are as follows: The assessee is a Hindu undivided family of which Sri A.B.V. Gowda was the karta and other members being his wife and children. A plot of land measuring 16.20 acres belonging to the assessee was acquired by the State Government. On October 11, 1967, the preliminary notification was issued and on September 1, 1969, the final notification was issued. On February 11, 1971, the possession of the lands was taken. On December 6, 1971, the assessee was, paid advance compensation of Rs.1,48,500. On July 10, 1974, the Land Acquisition Officer passed an award determining the compensation payable to the assessee at Rs.2,65,650 with interest at 5 per cent from February 11, 1971.…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492